Mistakes to Avoid When Filing for Bankruptcy
For many, the word ‘bankruptcy’ conjures up feelings of defeat, stress, and embarrassment. But in many cases, it’s a strategic move to wipe the slate clean and start afresh. While the process can provide relief, navigating the complex maze of bankruptcy laws and procedures in Utah can be daunting. As such, many fall prey to common pitfalls.
Common Mistakes in the Bankruptcy Process
Bankruptcy is a legal process that can help you get out of debt. However, it is important to avoid making mistakes when filing for bankruptcy. Here are some of the most common mistakes to avoid:
Mistake #1. Filing Under the Wrong Chapter
Utah provides for multiple types of bankruptcy, the most common being Chapter 7 and Chapter 13. Each serves a unique purpose and has its own set of eligibility criteria. Mistakenly filing under the wrong chapter can lead to dismissed cases or assets being unnecessarily liquidated. It’s essential to consult with a knowledgeable Utah bankruptcy attorney to determine the best course of action for your financial situation.
Mistake #2. Hiding Assets
Some individuals, out of fear, attempt to hide assets to protect them during the bankruptcy process. This act not only violates the law but can also lead to severe consequences, including dismissal of the bankruptcy case or potential criminal charges. You are required to disclose all of your assets when you file for bankruptcy. Transparency is crucial, and a qualified attorney at Alta Legal can guide you on how to legally protect certain assets.
Mistake #3. Accumulating More Debt Before Filing
Bankruptcy should not be viewed as a ticket to go on a spending spree. Courts can perceive such actions as fraudulent, especially if the debtor acquires significant debt right before filing. This can result in certain debts not being discharged.
Mistake #4. Waiting Too Long to File
Delay can exacerbate financial strain. Many individuals drain their savings or retirement accounts before seeking help. An early consultation with a bankruptcy attorney in Utah can provide insights into whether bankruptcy is the right path and potentially save valuable assets.
Mistake #5. Not Completing the Required Courses
Before and after filing for bankruptcy, there are mandatory credit counseling and debtor education courses, respectively. Failure to complete these can result in case dismissal. Trusted bankruptcy lawyers in Utah can advise on approved course providers and the timelines for completion.
Mistake #6. Handling It Alone
Filing for bankruptcy is a complex process, and it is important to get legal advice from an experienced bankruptcy attorney. An attorney can help you understand your options and choose the right chapter of bankruptcy for your situation.
Mistake #7. Transferring Assets
Transferring assets or paying off debts to family members or friends. This is called a fraudulent transfer, and it is illegal. If you transfer assets or pay off debts to family members or friends before filing for bankruptcy, your creditors could sue you.
Contacting Alta Legal Today
Making the decision to file for bankruptcy is significant, and while it offers a fresh financial start, it’s essential to avoid these common mistakes. The journey through bankruptcy doesn’t have to be daunting. Alta Legal and its team of dedicated Utah Bankruptcy Lawyers are equipped to guide you through the process, ensuring you receive the best possible outcome.
Are you seeking to understand your options better? Whether you’re in Taylorsville, West Jordan, or anywhere in Salt Lake City, Alta Legal stands ready to assist. Begin your journey towards financial freedom. Contact us today and let our team be your guide in this crucial decision-making process.
Remember, bankruptcy doesn’t mark the end; it’s a new beginning. Let’s start yours together.